Almost 80 per cent of Colombo’s container traffic represents cargo transhipped from Indian ports. One year after India’s first ICTT was commissioned, transhipment transactions have been almost insignificant. Will the terminal’s second year be any different?
Until last year, Indian trade was forced to depend on the neighbouring ports like Colombo, Singapore and Dubai for the transhipment of export-import containers. About 60 per cent of the country’s exim containers were transhipped through these ports. Transhipment of inbound or outbound containers from these foreign ports involved extra expense and extra transit time of up to eight days.
With the arrival of India’s first International Container Transhipment Terminal (ICTT) project at Vallarpadam, things were supposed to change. The commissioning of the first phase in February 2011 was aimed at saving these additional expenses and time and also probably to earn income by attracting the transhipment cargo from the neighbouring countries.
However, the terminal hasn’t made any significant headway in that purpose, except benefiting from congestion at JNPT and Chennai Port Trust. It has not taken advantage of a deeper draft and has only become a second terminal for Kochi port. According to the latest reports, the terminal has registered a negative growth of 5 per cent in the first ten days of January, compared to the same period in the financial year 2010-11. Meanwhile, the terminal operators claim positive growth of 5 per cent during January-December 2011.
Understandably, the blame game targets are widespread. The port operator blames it on the cabotage law, whose rules do not permit feeder services between Indian ports on foreign flag vessels. Major foreign shipping companies have requested the Shipping Ministry seeking for cabotage relaxation even as the Indian National Shipowners’ Association (INSA) is opposing such a step. The cabotage law is depriving it of a competitive advantage over other transhipment ports like Colombo, Singapore and Dubai, all of whom thrive on booming Indian business. Shipping companies say that although they have container cargo in Kochi, there is no Indian ship available to take it to other ports on the coastline. The transhipment activity cannot start till cabotage rules are relaxed.
Exorbitant and hidden charges for handling containers are another reason for the decline in business, according to the Port Staff Association. It is also reported that Kochi is steadily losing business, apparently on account of the procedural delays. Port users say that the sharp drop in business is mainly due to the procedural delays at customs, following certain contentious issues with the SEZ authorities over the operational role of the customs at the terminal.
There is also a row between the port operator and the customs on the inspection of goods passing through the terminal. The row has become a major negative factor in luring away many mainline vessels carrying international transhipment cargo from Vallarpadam. Most of them now prefer Colombo port, where they feel less harassed by customs inspections. Now, the Kochi Customs say that they have initiated various trade-friendly measures such as simplification of transhipment procedures with a view to boosting the business of the Vallarpadam ICTT.
Another major trouble the ICTT faces is the labour strikes. Cargo from the first container vessel was handled at the ICTT Vallarpadam a week after the inauguration of the terminal. Though the container vessel OEL Dubai had reached Kochi before commissioning the ICTT, it had to wait at the Rajiv Gandhi Container Terminal since the workers were on strike.
Another year in the same mode can affect the business at ICTT worse than the first year.
Leave a Reply
You must be logged in to post a comment.